Social Security History

This is an archival or historical document and may not reflect current policies or procedures.

Margaret M. Heckler

MARGARET M. HECKLER

Secretary

Department of Health and Human Services

When historians write a retrospective of the 20th century, Social Security--which is observing its 50th anniversary--will undoubtedly be identified as the most significant piece of domestic legislation enacted during that 100-year period. Born in adversity and tempered by crisis, Social Security--amended on numerous occasions over the years--has done more to lift and keep Americans out of poverty than any other governmental initiative.

When President Roosevelt signed the bill in 1935, millions of Americans were out of work; much of the country's industrial capacity was closed down--financial institutions were in disarray.

The new law authorized old-age insurance benefits for workers in commerce and industry to be financed by a payroll tax on workers and employers. Over the years since the program began, coverage was extended: to dependents of retired workers and survivors (1939), to farm and household workers, to the self-employed, to members of the Armed Forces (1950). Disability insurance was provided (1956) and Medicare enacted (1965).

The impact of the Social Security program is pervasive, almost every man, woman, and child in the United States is touched by it--directly or indirectly. There is hardly a family in America which does not have one or more members receiving benefits, usually an aging parent or grandparent.

Today, 50 years after its enactment, Social Security coverage is virtually universal. Ninty-five percent of all jobs are covered. Benefits are provided for:

disabled insured workers at any age;

insured workers at 62 (benefits taken before 65 are reduced);

spouses of retired or disabled workers;

children of retired, disabled or deceased workers; and

surviving spouses of deceased workers.

It should be noted that entitlement to Social Security benefits is guaranteed by statutory right, and benefits are payable without regard to non-work income or resources. Coverage is not a matter of administrative discretion; it is mandatory under the law. And benefits are automatically adjusted to keep pace with inflation.

But the benefits constitute a floor of protection and cannot be expected to do the entire job of income support. Some plan of supplementation should be undertaken, such as private pensions, investments, insurance, and savings.

The Social Security program at the half-century mark is fiscally sound. But that has not always been the case. In 1981, the Reagan Administration inherited a Social Security system that faced bankruptcy. Four years later, I am happy to say, the most recent Social Security Trustees Report indicates that OASDI benefits will be paid, on time, until well into the next century even under pessimistic economic assumptions. Last January, in fact, the Old Age and Survivors Insurance Trust Fund paid an installment of $4.4 billion on loans from the health insurance and disability trust funds.

Just as important, the administration of the program is stronger, more responsive and more flexible than ever before. In 1986, Social Security will pay benefits to more Americans than ever--37 million--while technology and management improvements will be able to reduce the work force by more than 1,600 full-time equivalent positions. That is testimony to good management, wise planning and a concern for taxpayer dollars.

Salvation has also been enhanced by another massive accomplishment--reducing the growth of medical inflation. For the first time in years, the increase in hospital costs--and health costs in general--has fallen. One of the major contributing factors in this staunching of the inflationary tide comes as the result of the prospective payment system which we at Health and Human Services have fairly but vigorously instituted and implemented without sacrificing quality care and superior treatment.

In Social Security's next 50 years there will be new challenges. Because of scientific breakthroughs, medical miracles and changes in lifestyles, the American people are living longer. There are more--there will be even more--fourth generation families. Social Security has been built on the bedrocks of compassion, prudence, and equity. They will remain as the bulwarks of the system as tomorrow's beneficiaries enjoy the blessing that is the Social Security System.

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